The USD lost significant ground against both the Pound and Euro during Thursday’s trading, marking the start of what could be a tougher year for the greenback, following such a prosperous 2018.
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Whilst some of those losses against GBP could be attributed to a bounce back following Wednesday’s sharp Sterling selloff, there was also a major market creak following Apple Inc’s warning on weak Chinese sales and dovish predictions for their Q1 turnover this year.
Thin trading conditions on Wednesday also had an impact according to Market Watch’s report, and the Pound closed over a cent higher than it had opened against the USD, by the end of European trading.
GBP/USD rates were trading back above 1.26, whilst EUR/USD rates moved above 1.14. Despite the USD finding some support around both of these levels, it will be a blow to those clients holding the Greenback.
USD sellers have experienced almost unprecedented levels of value against the Pound over recent months, but is this trend likely to reverse as we head through 2019?
Despite its recent lofty heights, there have been worrying undertones developing in the US economy over recent months, due to some holes in Trump’s tax reforms and falling oil prices.
There have been growing concerns over whether the current economic prosperity can continue, with President Trump quick to distance himself from the current downturn in the US stock market, despite claims to the contrary when it was flying high earlier last year.
The US FED have already predicted that they expect economic growth to slow in 2019 and this is likely to be one of the driving factors, behind what is likely to be a more dovish approach to further interest rate hikes this year.
Today’s Non-Farm Payroll figures could prove very insightful and could set the tone should they confirm any slowdown in economic output. The figure predicted is expected to show an improvement from last month’s 155k up to 177k.
However, if the official figure does not match or surpass this level, then we could see a further selloff of USD currency positions as we head towards the end of the first few trading days of 2019.
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